Gold traders are the most bullish in two months after US investors bought US bullion coins at the fastest pace in more than two years and China imported the most metal ever into Hong Kong. Many experts are predicting a gain next week in gold prices and expect its bullish trend to continue.

Gold traders are the most bullish in two months after mainland China imported the most metal ever from Hong Kong and investors bought U.S. bullion coins at the fastest pace in more than two years.

Eighteen of 23 surveyed by Bloomberg expect the metal to gain next week, the highest proportion since Nov. 11. Mainland China imported almost 102.8 metric tons in November, valued at about $5.4 billion, trade data on Jan. 11 showed. The U.S. Mint said it sold 85,500 ounces of American Eagle gold coins in the first 12 days of January. Full-month sales would reach 213,750 ounces at that pace, the most since December 2009.

Bullion rallied 6.2 percent since plunging to within 1 percentage point of a bear market on Dec. 29, on mounting concern that economic growth is slowing and European leaders are failing to contain the region’s debt crisis. Holdings (.GLDTONS) in exchange-traded products backed by the metal are heading for the biggest weekly expansion since mid-November and are within 2 percent of an all-time high, data compiled by Bloomberg show.

“The thing that’s caught people’s minds is the massive increase in Chinese buying,” said Ross Norman, chief executive officer of Sharps Pixley Ltd., a brokerage handling physical bullion in London. “Gold has demonstrated time and time again its ability to hold purchasing power. It looks expensive and people talk about bubbles, but it’s not.”

World Index

Bullion rose 10 percent last year on the Comex in New York, beating the 1.2 percent drop in the Standard & Poor’s GSCI Total Return Index of 24 commodities and the 9.4 percent decline in the MSCI All-Country World Index of equities. Treasuries returned 9.8 percent, a Bank of America Corp. index shows.

The metal fell almost 19 percent from its record closing price of $1,891.90 an ounce on Aug. 22 through Dec. 29, taking it below its 200-day moving average for the first time since January 2009. Prices closed above the moving average on Jan. 10 and settled at $1,630.80 in New York today.

Holdings in bullion-backed ETPs reached 2,357.3 tons yesterday, valued at $124.1 billion and exceeding the reserves of all but four central banks.

China overtook India in the third quarter as the largest gold-jewelry market, according to the World Gold Council. The gain in imports from Hong Kong may be a sign the central bank is adding to reserves, according to Sharps Pixley’s Norman. The People’s Bank of China last made known its gold reserves of 1,054 tons more than two years ago.

Call Options

There were 8,002 call options traded on Jan. 11 giving holders the right to buy the metal at $2,200 by July, and the six most widely held holdings are for calls at 22 percent above prices today, Comex data show. Options traders are making fewer bearish bets against the SPDR Gold Trust, the biggest gold- backed ETP, than at any time in the past 20 months.

Gold is also benefiting from concern the euro zone will tumble back into recession. Germany, the region’s biggest economy, shrank “roughly” 0.25 percent in the fourth quarter from the third, the Federal Statistics Office said Jan. 11. The euro region will contract 0.2 percent this year, compared with growth of 1.6 percent in 2011, the median of 21 economist estimates compiled by Bloomberg show.

The rebound in gold is being threatened by a strengthening dollar, which rose to a 15-month high against six major currencies this week. The 30-week correlation coefficient between the greenback and bullion is now at -0.43, data compiled by Bloomberg show, with a figure of -1 meaning the two always move in opposite directions.

Housing Stagnant

Global equities climbed today to the highest level since mid-November, and the U.S. Federal Reserve said Jan. 11 that the economy improved last month across most of the country even as hiring was limited and housing remained stagnant.

“Gold was held back toward the end of last year because of dollar strength and people having more confidence in the U.S. economy,” said Carole Ferguson, an analyst at Fairfax IS in London. “If people feel the U.S. economy will pull the whole world up a little bit, then you could see gold being very flat to trading down.”

Hedge funds and other money managers have become less bullish, cutting bets on higher prices by 56 percent since the beginning of August. They reduced their net-long position to 110,594 futures and options in the week ended Jan. 3, the lowest since January 2009, U.S. Commodity Futures Trading Commission data show. The last time the position was that low, prices climbed about 17 percent in the next four weeks.

Benchmark Contract

Ten of 22 traders and analysts surveyed by Bloomberg expect copper to fall next week and three were neutral. The metal for delivery in three months, the London Metal Exchange’s benchmark contract, declined 21 percent last year and gained 5.3 percent this month to $8,000 a ton.

Raw sugar retreated 27 percent last year and settled at 23.84 cents a pound today on ICE Futures U.S. in New York, and a 2.3 percent gain this month. Six of 11 people surveyed expect prices to gain next week.

Fourteen of 22 anticipate higher corn prices, while 15 of 24 said soybeans will advance. Corn fell 7.3 percent this month to $5.995 a bushel after increasing 2.8 percent in 2011. Soybeans are down 4.1 percent this month at $11.5825 a bushel after sliding 14 percent last year.

“You have a potential disturbance factor which is the euro crisis,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “Investors are optimistic that the global growth rates are still high enough to support demand and commodity prices.”